THE region's councils hope the state government has taken a step towards undoing years of cost-shifting which has threatened a range of local services.
Councils had protested a proposed rise to the emergency services levy for the coming financial year.
The state government imposed bill was going to see councils cough up tens of thousands of dollars they hadn't budgeted for in the 2019-20 financial year.
The Liverpool Plains Shire Council lobbied hard against the fee rise and mayor Andrew Hope said Tuesday's announcement would buy them some time.
"At least councils can plan for it in the future," he said.
"We can sit down and plan for it in our budgets."
But Cr Hope said he would support Tamworth's call for the levy to be scrapped altogether and have the state government fully fund emergency services.
Cr Hope estimated Liverpool Plains levy was going to rise by about $80,000 this year, which was a significant sum in a $20 million budget.
"We might have had to pass on that increase to the ratepayers and asking for more money is not something you want to do in times of drought," he said.
Tamworth mayor Col Murray also welcomed the announcement with his council looking to end the cost-shifting exercise once and for all.
Tamworth Regional Council was prepared to take a motion to the Local Government NSW conference calling for the levy to be scrapped.
But he said the now-defunct increase was what prompted the motion, so councillors would have to diiscuss where they went now.
"Unfortunately, local government is basically an agency of the state," Cr Murray said.
"So we don't have much option whether we disagree or not and it gets very frustrating."
"But it is great the NSW government is listening to local government."
Deputy premier John Barilaro acknowledged the drought as a reason for scrapping this year's fee rise, which was going to support firefighters diagnosed with cancer.
"The NSW government acknowledges that this additional cost presented challenges for councils, particularly those in regional and rural areas badly affected by the drought," Mr Barilaro said.
"That's why the government will fund the $13.6 million to cover the additional levy costs to support firefighters who develop cancer, to alleviate the immediate pressure on local councils.
"Our emergency services have long been funded through a cost sharing arrangement between insurers, councils and the government. It's important that this continues and we look after the health and well-being of our frontline firefighters."
The state government will pay the additional $13.6 million for the scheme which was sought through local councils.